took the leap

[gbb]

OK. The way I read it was that when he retires at 66 in two years time, he and his wife would be getting £450 per week from state pensions and a small private pension. I was wondering if he and wife would be entitled to full SP which would be in the region of £370 for both of them meaning that the private pension would be paying just £80 per week (£450 - £370). The OP may be better off in retirement than he realises.

My current State pension forecast is £220 a week (somewhere near that, I can't remember right now) I paid into SERPs for a good few years, thats why its above standard pension. Wife will get hers plus her government pension she took early, plus a small amount from my current employment pension. We don't spend that much, have no great hobbies or expensive pastimes and importantly, low outgoings.

I may be being overly pessimistic re further economic woes for the financial world...another aspect that concerns my wife is mine is limited to me, if I pass first, the pension dies with me, not even sure she would get anything if I pass before I draw it officially (that I will be finding out soon) but I don't see any good news on the horizon and still feel 2 years is a very short time to recoup all those losses. I may be wrong of course , I accept that, ....its all a lottery so's to speak.

Again, we are very cautious, a bird in the hand is definitely enter than one in the bush kind of attitude.

Appreciate everyone's input BTW, its interesting, especially as I don't really 'do' this kind of stuff.

 

[PaulSB]

I have a mental block here, I can see all the words, I understand what each word means, but strung together they don't make any sense,

I think I need to bite the bullet & go lay all the cards out on the table in front of an IFA & see what they say, I will be honest it irks me to have to pay £450 for that privilege although I also know they could save/make me far more than that in the long run.

If you find a good IFA it will be the best £450 investment you can make. I've been with mine for 20 years, she understands our family, the investments she encouraged us to make have continued to grow throughout Covid and the current crisis.

My advice would be to conduct a comprehensive review of your last twelve months spending. Every penny not a fag packet calculation but properly understanding how your money is spent. Before retiring I downloaded 12 months bank and credit card statements into a spreadsheet. Conducted a full analysis to properly understand our living costs, essentials and luxuries. The BIG shock was cash spending which neither of us could explain. I've a friend considering retirement who spends about £500/month in cash. She doesn't know on what. That is a problem.

A good IFA will have software which will run these numbers, your living expenses, income, life expectancy, ambitions for retirement etc. You will then be able to understand the likely financial outcome of retirement with projections for the remainder of your life.

My experience is this works and I find it a very real comfort. The information allowed me to choose retirement five years earlier than my gut said I should. If an IFA can't provide this advice don't use him or her. My IFA runs the numbers for me annually, it's a real comfort plus I know if I'm worried a phone call will get the info run any time I wish.

 

[Lozz360]

My current State pension forecast is £220 a week (somewhere near that, I can't remember right now) I paid into SERPs for a good few years, thats why its above standard pension. Wife will get hers plus her government pension she took early, plus a small amount from my current employment pension. We don't spend that much, have no great hobbies or expensive pastimes and importantly, low outgoings.

I may be being overly pessimistic re further economic woes for the financial world...another aspect that concerns my wife is mine is limited to me, if I pass first, the pension dies with me, not even sure she would get anything if I pass before I draw it officially (that I will be finding out soon) but I don't see any good news on the horizon and still feel 2 years is a very short time to recoup all those losses. I may be wrong of course , I accept that, ....its all a lottery so's to speak.

Again, we are very cautious, a bird in the hand is definitely enter than one in the bush kind of attitude.

Appreciate everyone's input BTW, its interesting, especially as I don't really 'do' this kind of stuff.

The £220 per week forecast is just that, a forecast of what you may get when you reach SP age in two years time. I was using the SP value of today. Anyway, if you used your forecasted value then you and your wife should get £440 SP per week which means yours and hers private pensions account for just £10 per week in your calculation of a combined income of £450 per week?

 

[PaulSB]

The £220 per week forecast is just that, a forecast of what you may get when you reach SP age in two years time. I was using the SP value of today. Anyway, if you used your forecasted value then you and your wife should get £440 SP per week which means yours and hers private pensions account for just £10 per week in your calculation of a combined income of £450 per week?

His wife won't necessarily get £220/week unless she paid SERPS or similar. The maximum she an get as SP is £184. It would be worthwhile to get a forecast on this as not everyone automatically gets the full SP. If that is the case the additional years can be purchased for +/-£880 each. Currently one can purchase as many as one wishes but this is soon to be limited to six years.

Financially buying the extra years is a no brainer.

The other point anyone getting a forecast in the very near future is the SP is likely to increase by +/-10% or £926 from May 2023. I can't see Liz Truss daring to break the triple lock this year.

 

[Lozz360]

His wife won't necessarily get £220/week unless she paid SERPS or similar.

That’s true of course. It’s a bit tricky when the OP starts a thread asking for our comments on his pending retirement, estimating what his and wife’s income will be, but omits to tell us how he has got to this value.

 

[PaulSB]

That’s true of course. It’s a bit tricky when the OP starts a thread asking for our comments on his pending retirement, estimating what his and wife’s income will be, but omits to tell us how he has got to this value.

I quite agree and I was really commenting for the OP's benefit, not intention to criticise your remark.

 

[gbb]

That’s true of course. It’s a bit tricky when the OP starts a thread asking for our comments on his pending retirement, estimating what his and wife’s income will be, but omits to tell us how he has got to this value.

well, at 64, scheduled to retire at 66, we have calculated we can survive ok ish on state pension plus her pension (combined should give us circa £450 a week) plus a small amount from my current employers pension.



Going for it...opinions ?

My current State pension forecast is £220 a week (somewhere near that, I can't remember right now) I paid into SERPs for a good few years, thats why its above standard pension. Wife will get hers plus her government pension she took early, plus a small amount from my current employment pension.

I refer the honourable gentleman to my previous answers.

It may not be all encompassing info but i'm not asking about IF i can afford to retire (comfortably), rather peoples opinions, experiences, pros and cons of drawdown.
But for the record...approximate figures of course
My pension £220 week
Wifes pension £180 week
Wifes Government pension £50 week
Add a small amount for my current works pension (and it really will be a small amount so probably not relevent)


Its worth also noting, we have quite substantial savings, no mortgage or rent, car is fairly new and paid for, a very low maintenance house so my outgoings arent huge by any means. I'm not concerned (and perhaps i should be, but i'm not) by how much we will be drawing, we're moderately sure we can survive ok on £450 a week (approximately of course)

The crux of it all is, at £55k last year, that pot is/was worth a bit less than £40 a week when i retire. That has already shrunk by around 25 % in the last 15 months 'ish and is probably now worth £30 weekly at retirement. Do i cash some in (drawdown) and protect from further large falls ?....being a cautious people, our mindset is to take the money and run. The outlook isnt great in the financial world, lots of talk of recession etc.
It may eventually be the wrong thing to do, it may not. You make a judgement and live with it. Its not an earth shattering amount of money in 2 years so no-ones going to die over the decision.

Again, thanks for the input all, genuinely.

 

[SpokeyDokey]

I refer the honourable gentleman to my previous answers.

It may not be all encompassing info but i'm not asking about IF i can afford to retire (comfortably), rather peoples opinions, experiences, pros and cons of drawdown.
But for the record...approximate figures of course
My pension £220 week
Wifes pension £180 week
Wifes Government pension £50 week
Add a small amount for my current works pension (and it really will be a small amount so probably not relevent)


Its worth also noting, we have quite substantial savings, no mortgage or rent, car is fairly new and paid for, a very low maintenance house so my outgoings arent huge by any means. I'm not concerned (and perhaps i should be, but i'm not) by how much we will be drawing, we're moderately sure we can survive ok on £450 a week (approximately of course)

The crux of it all is, at £55k last year, that pot is/was worth a bit less than £40 a week when i retire. That has already shrunk by around 25 % in the last 15 months 'ish and is probably now worth £30 weekly at retirement. Do i cash some in (drawdown) and protect from further large falls ?....being a cautious people, our mindset is to take the money and run. The outlook isnt great in the financial world, lots of talk of recession etc.
It may eventually be the wrong thing to do, it may not. You make a judgement and live with it. Its not an earth shattering amount of money in 2 years so no-ones going to die over the decision.

Again, thanks for the input all, genuinely.

Sorry to go OT (again ) but @PaulSB 's advice of understanding expenditure is very good. Maybe you do this already but if you don't it's really worth it.

We run our cashflow projections (which obviously include a thorough understanding of all expenditure) for 2 decades ahead and when we started this back in the early 2000's it gave us the confidence to ditch our corporate careers and downshift at a pretty young age (48 &41).

The 2 decades ahead is probably a bit extreme, but like you ,and in spite of being comfortably well off we are very cautious with our finances. The principle remains though, and a simple cashflow doesn't take long to knock up in Excel and it might surprise you how much you don't need to live on.

We were stunned when we did the maths back in the early 2000's - in truth we had no exact fix of where our income was going. We had an awful lot of money pa coming in, but that situation can, and did, make us lazy on the money management front. An astute friend of ours woke us up to this fact! And we've never really looked back.

Personally I'd go with drawdown, thus keeping your options open, but if you are unsure then some professional advice would be the best way to go.

Good luck with your decision making and your eventual retirement.

 

[PaulSB]

I refer the honourable gentleman to my previous answers.

It may not be all encompassing info but i'm not asking about IF i can afford to retire (comfortably), rather peoples opinions, experiences, pros and cons of drawdown.
But for the record...approximate figures of course
My pension £220 week
Wifes pension £180 week
Wifes Government pension £50 week
Add a small amount for my current works pension (and it really will be a small amount so probably not relevent)


Its worth also noting, we have quite substantial savings, no mortgage or rent, car is fairly new and paid for, a very low maintenance house so my outgoings arent huge by any means. I'm not concerned (and perhaps i should be, but i'm not) by how much we will be drawing, we're moderately sure we can survive ok on £450 a week (approximately of course)

The crux of it all is, at £55k last year, that pot is/was worth a bit less than £40 a week when i retire. That has already shrunk by around 25 % in the last 15 months 'ish and is probably now worth £30 weekly at retirement. Do i cash some in (drawdown) and protect from further large falls ?....being a cautious people, our mindset is to take the money and run. The outlook isnt great in the financial world, lots of talk of recession etc.
It may eventually be the wrong thing to do, it may not. You make a judgement and live with it. Its not an earth shattering amount of money in 2 years so no-ones going to die over the decision.

Again, thanks for the input all, genuinely.

My advice would be no leave it alone. If you are confident your pension income is adequate and/or you're prepared to top it up from savings then leave this £55k pot alone. It will recover. You've already lost +/-£14k and that probably represents the biggest losses.

The £450/week you mentioned is close to what my household lives off quite comfortably. How true that will be when I look at the true cost of energy for the next 12 months remains to be seen.

 

[Lozz360]

Personally, if it was me, I would do two things. Leave the £55k pot alone and increase the payments to your current works pension to the maximum. Then at retirement convert both the £55k pot and the most recent works pension into a suitable flexible drawdown pension. I strongly suggest you use the services of an IFA to validate the strategy and select a pension that is suitable for you.

 

[SpokeyDokey]

Personally, if it was me, I would do two things. Leave the £55k pot alone and increase the payments to your current works pension to the maximum. Then at retirement convert both the £55k pot and the most recent works pension into a suitable flexible drawdown pension. I strongly suggest you use the services of an IFA to validate the strategy and select a pension that is suitable for you.

It's dropped from £55k but I agree with what you say.

 

[cougie uk]

If you find a good IFA it will be the best £450 investment you can make. I've been with mine for 20 years, she understands our family, the investments she encouraged us to make have continued to grow throughout Covid and the current crisis.

My advice would be to conduct a comprehensive review of your last twelve months spending. Every penny not a fag packet calculation but properly understanding how your money is spent. Before retiring I downloaded 12 months bank and credit card statements into a spreadsheet. Conducted a full analysis to properly understand our living costs, essentials and luxuries. The BIG shock was cash spending which neither of us could explain. I've a friend considering retirement who spends about £500/month in cash. She doesn't know on what. That is a problem.

A good IFA will have software which will run these numbers, your living expenses, income, life expectancy, ambitions for retirement etc. You will then be able to understand the likely financial outcome of retirement with projections for the remainder of your life.

My experience is this works and I find it a very real comfort. The information allowed me to choose retirement five years earlier than my gut said I should. If an IFA can't provide this advice don't use him or her. My IFA runs the numbers for me annually, it's a real comfort plus I know if I'm worried a phone call will get the info run any time I wish.

I've been to a cash point maybe two or three times since lockdown.
Really helps identify what you spend on when everything is on a card.

With cash it's really hard to identify and I'd bet a good deal never gets spent and is in pockets or down the back of sofas.

 

[gbb]

Well, as a callback from the provider nears, i have been assessing options and looking at my account, pensions at the moment are a bit of a horror story.
Circa 18 months ago, pot was £55k
One year later, £45k (that was around June)
A few weeks later £ 41k
Looked this weekend £38k

So since i began this train of thought, its dropped around £7k in that short time

I'm binning the idea of drawdown. I'm too late to capitalise on the original pot, its dropping so fast i might as well sit on it, maybe reconsider in a couple years , hope things settle down.

Thanks for the input everyone. (psst, don't look at your pensions pot, its a horror story at the moment)

 

[SpokeyDokey]

Well, as a callback from the provider nears, i have been assessing options and looking at my account, pensions at the moment are a bit of a horror story.
Circa 18 months ago, pot was £55k
One year later, £45k (that was around June)
A few weeks later £ 41k
Looked this weekend £38k

So since i began this train of thought, its dropped around £7k in that short time

I'm binning the idea of drawdown. I'm too late to capitalise on the original pot, its dropping so fast i might as well sit on it, maybe reconsider in a couple years , hope things settle down.

Thanks for the input everyone. (psst, don't look at your pensions pot, its a horror story at the moment)

Your pot is just tracking the markets.

Just keep an eye on them and be ready to make a decision once they recover.

No idea what funds your pot is invested in but as a very rough rule once the Footsie 100 hits around 7500 things usually look a lot rosier.

I do stress that the above really Is very rough but it works for us.

Hang in there! 🙂

 

[Lozz360]

I found this on the internet, below. I reckon we are currently in the Denial phase moving towards Panic phase.